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(troutnut/Getty Images) A recent auction highlights the headwinds facing American oil producers.
Wednesday’s auction of oil and gas drilling rights on the Alaskan Coastal Plain was worse than disappointing. The lease offering was a culmination of decades of work, opening to development 1.5 million acres that many considered the biggest single prospect in America. The high expectations fell embarrassingly flat when the bids were opened. Half of the acreage could not even muster a qualifying bid. The bidders who did win are stalking-horse bidders, planning to hold the leases and flip them to a bona fide oil company in the years to come. Those bona fide oil companies who would eventually drill wells to deliver oil to consumers and royalties to the Treasury opted to pass and invest elsewhere.